BP, Iraq reach final redevelopment agreement in Kirkuk

BP reached agreement on all contractual terms with the Government of the Republic of Iraq to invest in several giant oil fields in Kirkuk providing for the rehabilitation and redevelopment of the fields, spanning oil, gas, power and water with potential for investment in exploration. The agreement is subject to final governmental ratification.

BP will work under the guidance of the Government of Iraq in setting up the new operator, which will be an unincorporated organization comprising predominantly personnel from the North Oil Company (NOC) and North Gas Company (NGC), but also with secondees from BP. The new operating organization will take over operations at Kirkuk from NOC. Subsequent to this agreement, BP expects to form a standalone incorporated joint venture to hold its interests in the operator.

The agreement is for an initial phase and includes oil and gas production of more than 3 billion barrels of oil equivalent (boe). It includes the Baba and Avanah domes of the Kirkuk oil field and three adjacent fields – Bai Hassan, Jambur and Khabbaz – in Federal Iraq, all of which are currently operated by the NOC. The wider resource opportunity across the contract and surrounding area is believed to include up to 20 billion barrels of oil equivalent.

Work will include a drilling program, the rehabilitation of existing wells and facilities, and the construction of new infrastructure, including gas expansion projects.